Citigroup Inc (NYSE:C) will issue its first quarter results via press release at approximately 8 a.m. (ET) on Monday, April 14, 2014. At 11 a.m. (ET), results will be reviewed via live webcast and teleconference.
Wall Street anticipates that money center will earn $1.14 per share for the quarter, which is $0.09 less than last year's profit of $1.23 per share. iStock expects C to miss Wall Street's consensus number. The iEstimate is $1.13, a penny less than expected.
Sales, like earnings, are expected to slip, dropping 5.5% year-over-year (YoY). Citigroup's consensus revenue estimate for Q1 is $19.37 billion, lower than last year's $20.49 billion.
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Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
It's possible that C might do worse than the iEstimate as 2013's strongest unit in terms of growth, the bank's trading group, is suffering to start 2014. According to team Citigroup, trading will be down in the "high mid-teens" year-over-year (YoY). Meanwhile, another pillar, mortgages are slowing as well due to rising rates.
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According to CNBC, "Refinance activity has been falling steadily since the rate rise early last summer. Applications to refinance fell 5 percent last week [March 31 – April 4] from the previous week and are now at their lowest level since the end of 2013."
That's a one-two punch.
Watch out for the left hook as consumer credit via credit cards declines in the first two months of the years so says data from the Federal Reserve's Consumer Credit - G.19 report. For February, the central bank reported, "Revolving credit decreased at an annual rate of 3-1/2 percent."
Three of the financial giant's biggest margin businesses are under pressure as 2014 gets rolling. And, we haven't even mentioned higher cost and expenses in terms of technology and manpower to meet the challenge of complying with new, 2014 banking regulations.
That's not a good combination for the bottom line; falling revenue and higher expenses. Perhaps that's why nine analysts lowered their profit outlook for Citi in the last 30 days; however, three upped their view during the same timeframe.
Another major issue management will have to address is the Federal Reserve giving Citi's the thumbs down for its 2014 Comprehensive Capital Analysis and Review (CCAR) i.e. upping the dividend and stock repurchase program.
Overall: There are so many parts moving in the wrong direction for Citigroup Inc (NYSE:C) that it is hard to find a path to a bullish surprise. In fact, the iEstimate might prove to be attractive compared to actual results come Monday morning.
We see many of our C concerns coming to life in today's JPMorgan Chase & Co. (NYSE:JPM) earnings announcement.
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